Neo Exceeds 2025 Guidance and Advances Strategic Growth Initiatives
TORONTO, March 19, 2026 /CNW/ - Neo Performance Materials Inc. ("Neo" or the "Company") (TSX: NEO) (OTCQX: NOPMF) today announced its financial results for the fourth quarter and full year 2025. Neo's financial statements and management's discussion and analysis ("MD&A") for the year ended December 31, 2025, are available at neomaterials.com and on SEDAR+ at sedarplus.ca. All financial amounts in this news release and the Company's financial disclosures are in United States dollars, unless otherwise stated.
"2025 was a year of meaningful execution and strategic progress for Neo. We delivered full-year Adjusted EBITDA of $75.6 million, exceeding our previously issued guidance, while advancing key initiatives that strengthen our long-term growth platform," said Rahim Suleman, President and Chief Executive Officer of Neo.
"Across our businesses we saw strong demand from structural growth drivers including electrification, automation, AI infrastructure, and aerospace. During the year we also achieved several important strategic milestones, most notably the continued execution of our European platform, including the grand opening of our European Permanent Magnet facility, more program awards, ongoing progress toward commercializing magnet production and advancing our heavy rare earth separation capability in Europe. In addition, we delivered double--digit growth in our Emission Catalyst platform and completed the divestiture of our legacy China separation assets, further simplifying the portfolio and sharpening our focus on higher--value, strategically differentiated businesses."
"As global supply chains increasingly prioritize security and localization for critical materials, Neo's integrated platform positions us well to serve our customers across magnets, specialty materials, and rare metals. With strong operational momentum and a simplified portfolio focused on higher-value businesses, we are entering 2026 well positioned to continue delivering disciplined growth and long-term value for shareholders."
Strategic and Operational Highlights
-- Full year Adjusted EBITDA(1) of $75.6 million increased 17% over prior
year and exceeded 2025 guidance reflecting strong execution and
meaningful earnings growth in Magnequench and Chemicals & Oxides, with
performance partially offset by expected moderation in Rare Metals
following record prior year levels.
-- Magnequench ("MQ") generated Adjusted EBITDA of $6.0 million for the
quarter and $28.4 million for the year, supported by strong volume growth
and continued operational discipline.
-- Chemicals & Oxides ("C&O") delivered significant earnings improvement,
with Adjusted EBITDA of $7.1 million for the quarter and $23.4 million
for the year reflecting portfolio optimization and operational
efficiencies.
-- Rare Metals ("RM") delivered solid results with $12.3 million in
quarterly Adjusted EBITDA and $43.2 million for the year, despite
normalization of hafnium pricing following record levels in 2024.
-- Neo's European Permanent Magnet facility reaches key milestones.
Following its grand opening in September 2025, Neo's European Permanent
Magnet facility advanced through qualification and early operational
milestones, including production of its one--millionth magnet and support
of multiple customer qualification programs ahead of the expected
commercial ramp--up in 2026. During the year, Neo entered into a
multi-year memorandum of understanding with Bosch, reserving annual
production capacity from the European facility and reinforcing customer
demand visibility. The facility also received high--profile recognition
when a Made--in--Europe Neo permanent magnet was showcased at the 2025 G7
Summit, underscoring the strategic importance of localized and secure
supply chains for critical materials.
-- Neo continued advancing its heavy rare earth separation demonstration
line at its Silmet facility in Estonia, which is expected to produce
dysprosium and terbium beginning in 2026 to support magnet manufacturing
and other critical applications.
-- Neo reached a settlement during the year related to legacy intellectual
property litigation in its Emission Catalyst business, resolving a
long--standing matter and reducing ongoing legal cost exposure and
uncertainty.
-- Neo successfully completed the sale of its Chinese rare earth separation
assets in March 2025, simplifying the portfolio, reducing exposure to
price volatility, and reallocating capital toward higher--value
downstream growth initiatives.
__________________________________
(1) Neo reports non-IFRS financial measures such as
"Adjusted Net Income", "Adjusted Earnings per Share",
"Adjusted EBITDA", "Adjusted EBITDA Margin" and "EBITDA".
Information on non-IFRS financial measures is included
in the "Non-IFRS Financial Measures" section of this
news release and in the most recent MD&A, available
at neomaterials.com and on SEDAR+ at sedarplus.ca.
Outlook
Neo enters 2026 with strong operational momentum and continued progress across its strategic growth initiatives.
The Company expects continued demand across key end markets supported by structural trends including electrification, automation, artificial intelligence infrastructure and aerospace applications. Governments and customers are increasingly focused on developing secure and localized supply chains for critical materials.
Neo's European Permanent Magnet facility continues to advance through qualification milestones, with commercial production expected to ramp during 2026. The Company expects to progress multiple customer magnet programs toward start of production, scale volumes as the year advances, and announce additional magnet awards in Europe. Neo is also advancing planning activities for a potential Phase 1b expansion, which would increase annual capacity from approximately 2,000 metric tonnes to 5,000 metric tonnes. In parallel, the Company is advancing its heavy rare earth separation capability at Silmet to further strengthen its integrated critical materials platform.
Based on current market conditions and operational performance, Neo has established 2026 Adjusted EBITDA guidance of $75 million to $80 million.
Consolidated Financial Highlights
-- Revenue for Q4 2025 was $120.3 million, compared to $134.9 million for Q4
2024. For the year ended December 31, 2025, revenue was $478.8 million
compared to $475.8 million in 2024.
-- Operating income for Q4 2025 was $5.6 million, compared to $12.4 million
for Q4 2024. For the year ended December 31, 2025, operating income was
$31.8 million, compared to $35.3 million in 2024.
-- Adjusted EBITDA for Q4 2025 was $20.4 million compared to $20.7 million
for Q4 2024. For the year ended December 31, 2025, Adjusted EBITDA was
$75.6 million compared to $64.4 million in 2024. This resulted in
Adjusted EBITDA margin of 16.9% for the quarter and 15.8% for the full
year, representing an improvement of 160 basis points for the quarter and
230 basis points over 2024.
-- Adjusted Net Income(1) for Q4 2025 was $0.6 million, or $0.01 earnings
per share, compared to Adjusted Net Loss of $4.9 million or $0.12 loss
per share for Q4 2024. For the year ended December 31, 2025, Adjusted Net
Income was $20.5 million, or $0.49 earnings per share, compared to
Adjusted Net Income of $1.9 million, or $0.05 earnings per share in 2024.
-- Operating Cash Flow for the year ended December 31, 2025, was an outflow
of $54.0 million in cash from operating activities, driven by higher
strategic inventory held due to geopolitical risks, higher receivables
due to timing of sales, as well as the settlement of a European patent
claim for $12.5 million in March of 2025. As of December 31, 2025, Neo
had $38.4 million in cash and $101.8 million in gross debt on its balance
sheet.
-- Capital investment for the year ended December 31, 2025 was $23.3 million,
with funds used primarily to advance the European Permanent Magnet
facility and heavy rare earth demonstration pilot line in Europe.
-- Shareholder return of capital for the year ended December 31, 2025
consisted of $12.1 million in dividends to shareholders and $4.0 million
of common shares repurchased for cancellation under the normal course
issuer bid ("NCIB").
-- A quarterly dividend of CAD$0.10 per common share was declared on March
12, 2026, for shareholders of record on March 19, 2026, with a payment
date of March 26, 2026.
Segment Highlights
Magnequench Delivers Strong Volume Growth and Strategic Progress:
-- Financial Performance: Magnequench generated Adjusted EBITDA of
$6.0 million in the fourth quarter and $28.4 million for the year,
representing a decrease of $0.8 million for the quarter and an increase
of $2.8 million or 11% for the full year compared to the same periods in
2024. Full year performance reflects strong volume growth and continued
operational discipline during 2025.
-- Record Bonded Magnet Volumes: Bonded magnet shipments reached record
quarterly levels, increasing 34.9% year-over-year, supported by
accelerating demand in applications including electrification, industrial
automation, and advanced computing infrastructure.
-- Strong Powder Sales: Bonded powder volumes increased 17.3% year-over-year,
reflecting continued market share gains, strong underlying demand from
global customers, and select customers building additional safety stock
amid heightened geopolitical and supply chain risk.
-- Strategic Platform Expansion: During the year, Neo continued advancing
its European Permanent Magnet facility, which is progressing through
qualification and early operational milestones ahead of expected
commercial production ramp-up in 2026.
Chemicals & Oxides Delivers Significant Earnings Growth and Portfolio Transformation:
-- Strong Profitability Growth: Full year Adjusted EBITDA increased
approximately 376% year-over-year reaching $23.4 million, with
$7.1 million generated in the fourth quarter, reflecting improved pricing,
strong operational execution, and the benefits of portfolio optimization.
-- Portfolio Simplification: Following the divestiture of legacy Chinese
separation assets earlier in the year, the Chemicals & Oxides segment is
increasingly focused on higher-value specialty materials businesses
including emission catalysts and wastewater treatment solutions.
-- Strong End-Market Demand: Emission catalyst volumes exceeded the
Company's previously communicated full--year growth target of 10%,
reflecting strong global automotive demand.
-- Wastewater Treatment Growth: Wastewater treatment delivered strong growth,
with quarterly volumes increasing 13.9% year-over-year, and 32.2% for the
full year, driven by updated customer value proposition, and supported by
rising environmental compliance standards and global sustainability
initiatives.
-- Strategic European Separation Capabilities: Neo continues to operate one
of the few non-captive rare earth separation facilities in Europe. The
heavy rare earth separation demonstration line at Silmet remains on track
and on budget as the Company advances commissioning activities and
prepares for initial production milestones in 2026.
Rare Metals Maintains Solid Performance Amid Hafnium Price Normalization:
-- Resilient Financial Results: Adjusted EBITDA totaled $12.3 million for
the quarter and $43.2 million year-to-date, down 29.3% and 16.5%,
respectively, from the prior-year periods, reflecting the expected
normalization of hafnium prices following record highs in 2024, with
renewed upside emerging in 2026.
-- Healthy End-Market Demand: Rare Metals continues to benefit from robust
demand in aerospace, industrial gas turbine, and semiconductor markets,
supported by ongoing global investment in advanced manufacturing and
clean energy technologies.
-- Hafnium Price Moderation: Hafnium quarterly gross margins declined
year-over-year as prices stabilized, moderating profitability compared to
last year's exceptional levels. Subsequently, prices increased
significantly in the fourth quarter of 2025 reaching new record levels
early in 2026 amid tight supply conditions.
-- Gallium Business Strength: Neo's gallium business continued to perform
well, benefiting from strong pricing and increasing regulatory focus on
supply security. Neo remains one of the few gallium recyclers in North
America, reinforcing the segment's strategic importance and long-term
growth potential.
-- Strategic Supply Initiatives: The segment continues to focus on securing
scrap and input materials through strategic sourcing partnerships and
recovery initiatives, ensuring a stable, diversified supply base to
support future growth.
Conference Call
Neo's fourth quarter 2025 financial results webcast and conference call details are provided below.
Webcast and Conference Call Details:
Date: Thursday, March 19, 2026
Time: 10:00 AM ET | 7:00 AM PT
Listen Only Webcast: Webcast Link
Conference call: +1 (416) 945-7677 (local) or 1 (888) 699-1199 (toll-free long distance) or by visiting Dial-in Link.
A replay of the webcast will be available by clicking on this LINK and will be archived on the Company's website for a limited period. A teleconference recording may be accessed by calling 1(289) 819-1450 (local) or 1 (888) 660-6345 (toll-free long distance) and entering passcode 65901# until April 14, 2026.
Non-IFRS Financial Measures
This new release refers to certain specified financial measures and ratios, including non-IFRS financial measures and ratios such as "EBITDA", "Adjusted EBITDA", "Adjusted EBITDA Margin", "Adjusted Net Income", "Adjusted Earnings per Share", "Free Cash Flow" and "Gross Margin". These specified financial measures are not recognized measures under International Financial Reporting Standards ("IFRS") accounting standards as issued by the International Accounting Standards Board, do not have a standardized meaning prescribed by IFRS, and may not be comparable to similar measures presented by other companies. Rather, these specified financial measures ("non-IFRS financial measures") are provided as additional information to complement IFRS financial measures by providing further understanding of Neo's results of operations from management's perspective. Neo's definitions of non-IFRS financial measures used in this news release may not be the same as the definitions for such measures used by other companies in their reporting.
Specified financial measures such as non-IFRS financial measures and ratios have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of Neo's financial information reported under IFRS. Neo uses specified financial measures to provide investors with supplemental measures of its base-line operating performance and to eliminate items that have less bearing on operating performance or operating conditions and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. Neo believes that securities analysts, investors and other interested parties frequently use specified financial measures such as non-IFRS financial measures and ratios in the evaluation of issuers. Neo's management also uses non-IFRS financial measures and ratios to facilitate operating performance comparisons from period to period. Readers are cautioned that these measures should not be construed as an alternative to their nearest or directly comparable financial measures determined in accordance with IFRS as an indication of Neo's financial performance. For further information on how Neo defines such specified financial measures, including non-IFRS financial measures and ratios and, where applicable, their reconciliations to the nearest comparable IFRS measures, please see the "Non-IFRS Financial Measures" section of Neo's MD&A for the year ended December 31, 2025, which is hereby incorporated by reference into this news release, and at neomaterials.com and on SEDAR+ at sedarplus.ca.
About Neo Performance Materials
Neo manufactures the building blocks of many modern technologies that enhance efficiency and sustainability. Neo's advanced industrial materials, rare earth magnetic powders and magnets, specialty chemicals, metals, and alloys are critical to the performance of many everyday products and emerging technologies across industries. Neo's products help to deliver the technologies of tomorrow to consumers today.
As at December 31, 2025, Neo has 1,524 employees and a global platform that includes manufacturing facilities located in Canada, China, Estonia, Germany, Thailand, and the United Kingdom ("UK") as well as one dedicated research and development ("R&D") centre in Singapore. Neo has three operating segments: Magnequench, Chemicals & Oxides ("C&O") and Rare Metals, as well as the Corporate segment.
Cautionary Statements Regarding Forward Looking Statements
This news release contains "forward-looking information", within the meaning of applicable securities laws in Canada. Forward-looking information may relate to future events or future performance of Neo. All statements in this news release, other than statements of historical facts, with respect to Neo's objectives and goals, as well as statements with respect to its beliefs, plans, objectives, expectations, anticipations, estimates, and intentions are forward-looking information.
Specific forward-looking information in this news release include, but are not limited to: expectations regarding certain of Neo's future results and information, including, among other things; revenue; expenses; growth prospects; capital expenditures; and operations; risk factors relating to national or international economies, geopolitical risk and other risks present in the jurisdictions in which Neo, its customers, its suppliers, and/or its logistics partners operate; statements with respect to current and future market trends that may directly or indirectly impact sales and revenue of Neo, including but not limited to the price of rare earth elements; expected use of cash balances; continuation of prudent management of working capital; source of funds for ongoing business requirements and capital investments; expectations regarding sufficiency of the allowance for uncollectible accounts and inventory provisions; analysis regarding sensitivity of the business to changes in exchange rates and changes in rare earth prices; impact of recently adopted accounting pronouncements; risk factors relating to intellectual property protection and intellectual property litigation; expectations regarding demand for products and applications; expectations regarding the growth of superalloy and superconductor materials; anticipated commercial launch of Neo's new Permanent Magnet facility in Europe and related commercial production estimates, forecasted budget, commissioning and costs associated with the facility; Neo's requalified product portfolio, including the NAMCO product portfolio; expectations regarding tariffs and export restrictions; securing new automotive customer agreements for permanent magnet and emission catalyst facilities; expectations concerning the continued growth of the Magnequench project and
improvements in operations; expectations concerning any remediation efforts to Neo's design of its internal controls over financial reporting and disclosure controls and procedures; and Neo's 2026 guidance and the assumptions relating thereto.
Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "continues", "forecasts", "projects", "predicts", "intends", "anticipates" or "believes", or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. This information involves risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information.
Additionally, Neo's 2026 guidance reflects Neo's expectations as to financial performance in 2026 based on assumptions which Neo believes to be reasonable as of the date of this news release including but not limited to continued Magnequench growth, operational improvements in C&O, relative stability in rare earth pricing, continued strong hafnium demand alongside elevated pricing and tight raw material supply conditions, reduction in operating expenses, expectations regarding tariffs and export controls, and securing new customer agreements for permanent magnet and emission catalyst facilities. Neo believes the expectations reflected in such forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking information included in this discussion and analysis should not be unduly relied upon. For more information on Neo, investors should review filings available under Neo's profile at sedarplus.ca.
Information contained in forward-looking statements in this news release is provided as of the date hereof and Neo disclaims any obligation to update any forward-looking information, whether as a result of new information or future events or results, except to the extent required by applicable securities laws.
HIGHLIGHTS OF FOURTH QUARTER 2025 CONSOLIDATED PERFORMANCE
($000s, except Three Months Ended Year endedDecember 31,
per share December 31, 2025
information)
2025 2024 2025 2024
Revenue
Magnequench $ 54,956 $ 43,500 $ 204,555 $ 176,649
C&O 29,252 43,606 135,030 146,516
Rare Metals 39,686 48,441 147,665 156,206
Corporate /
Eliminations (3,624) (644) (8,457) (3,543)
Consolidated
Revenue $ 120,270 $ 134,903 $ 478,793 $ 475,828
Operating Income
(Loss)
Magnequench $ (4,530) $ 2,018 $ 1,486 $ 10,123
C&O 5,330 27 17,480 (2,854)
Rare Metals 11,622 16,910 40,727 50,134
Corporate /
Eliminations (6,831) (6,600) (27,939) (22,102)
Consolidated
Operating Income $ 5,591 $ 12,355 $ 31,754 $ 35,301
Adjusted EBITDA
Magnequench $ 6,017 $ 6,824 $ 28,377 $ 25,528
C&O 7,093 1,350 23,444 4,924
Rare Metals 12,288 17,383 43,200 51,762
Corporate /
Eliminations (5,031) (4,866) (19,375) (17,816)
Consolidated
Adjusted EBITDA $ 20,367 $ 20,691 $ 75,646 $ 64,398
Net Loss $ (15,628) $ (12,037) $ (9,969) $ (13,016)
Loss per share
attributable to
common
shareholders
Basic and diluted $ (0.38) $ (0.29) $ (0.24) $ (0.31)
Cash spent on
property, plant
and equipment
and intangible
assets $ 3,518 $ 12,019 $ 31,664 $ 64,202
Cash taxes
(refunded) paid $ (863) $ 3,579 $ 10,328 $ 22,411
Dividends paid to
shareholders $ 2,959 $ 3,062 $ 12,053 $ 12,330
Dividend paid to
Buss & Buss
minority
shareholder $ -- $ 7,967 $ 7,343 $ 15,183
Repurchase of
common shares
under the NCIB $ 106 $ -- $ 3,995 $ 2,250
As at: December 31, December 31, 2024
2025
Cash and cash
equivalents $ 38,360 $ 85,489
Short-term debt,
bank advances &
other $ 12,949 $ 2,740
Total debt $ 101,804 $ 71,536
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
($000s) December 31, 2025 December 31, 2024 ASSETS Cash and cash equivalents $ 38,360 $ 85,489 Accounts receivable 93,186 61,232 Inventories 205,405 139,321 Income taxes receivable 2,196 4,108 Assets held for sale -- 40,949 Other current assets 24,070 24,264 Total current assets 363,217 355,363 Property, plant and equipment 198,440 178,925 Intangible assets 30,857 33,580 Goodwill 65,857 64,029 Equity method investments 17,116 16,330 Other investments 3,496 217 Deferred tax assets 2,799 4,045 Other non-current assets 3,105 765 Total non-current assets 321,670 297,891 Total assets $ 684,887 $ 653,254 LIABILITIES AND EQUITY Short-term debt $ 12,949 $ 2,740 Accounts payable and other accrued charges 95,844 69,546 Income taxes payable 15,120 10,463 Provisions 3,470 12,512 Lease obligations 564 1,229 Derivative liability 60,596 47,416 Current portion of long-term debt 9,343 4,610 Liabilities directly associated with the assets held for sale -- 10,254 Other current liabilities 252 647 Total current liabilities 198,138 159,417 Long-term debt 79,512 64,186 Derivative liability 1,407 1,311 Provisions 2,392 6,726 Deferred tax liabilities 9,405 12,646 Lease obligations 3,170 3,244 Other non-current liabilities 395 842 Total non-current liabilities 96,281 88,955 Total liabilities 294,419 248,372 Non-controlling interest 464 2,714 Equity attributable to common shareholders 390,004 402,168 Total equity 390,468 404,882 Total liabilities and equity $ 684,887 $ 653,254
See accompanying notes to this table in Neo's audited consolidated financial statements as at December 31, 2025 and for the year then ended.
CONSOLIDATED RESULTS OF OPERATIONS
($000s) Three Months Year endedDecember 31,
EndedDecember 31,
2025 2024 2025 2024
Revenue $ 120,270 $ 134,903 $ 478,793 $ 475,828
Cost of sales
Cost excluding
depreciation and
amortization 82,548 94,466 337,006 343,315
Depreciation and
amortization 2,021 2,512 7,963 8,553
Gross profit 35,701 37,925 133,824 123,960
Expenses
Selling, general and
administrative 17,763 16,446 64,382 61,400
Share-based compensation 3,428 770 11,958 3,060
Depreciation and
amortization 1,744 1,796 7,043 7,192
Research and development 7,175 6,894 18,687 16,869
(Reversal of impairment)
/ impairment of assets -- (336) -- 138
Total expenses 30,110 25,570 102,070 88,659
Operating income 5,591 12,355 31,754 35,301
Other (expense) income (7,270) 507 (11,753) 3,405
Finance cost, net (9,535) (13,882) (23,789) (27,488)
Foreign exchange gain
(loss) (559) (4,236) 7,407 (4,268)
Income from operations
before income taxes and
equity
income of associates (11,773) (5,256) 3,619 6,950
(MORE TO FOLLOW) Dow Jones Newswires
March 19, 2026 07:00 ET (11:00 GMT)
